Carrier Promotions Offset Higher iPhone Prices, Bank of America Says

Promotions from U.S. wireless carriers have become generous enough to offset recent price increases for Apple's latest iPhones, potentially bolstering demand for the new devices, according to a research note from Bank of America.

Analyst Wamsi Mohan noted that the richer subsidies could continue to support consumer interest even as early shipping data suggests lead times for the iPhone 18 Pro and Pro Max are shorter than last year's models.

Subsidies Reach New Highs

Bank of America's analysis found that carrier promotions have escalated, largely absorbing the impact of Apple's higher pricing this year. The note highlights several key figures:

• Maximum trade-in credits for the iPhone 18 Pro Max have climbed to $1,200.
• This represents an increase from $1,100 offered for last year's model and $1,000 from the year prior.
• Carrier financing programs that spread device payments over 36 months also enhance affordability for consumers.

Mohan, who reiterated a Buy rating and a $370 price target on Apple stock, stated that "the higher promotions largely offset Apple’s higher pricing this year."

A Strategic Move for Carriers

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The promotions are a strategic tool for carriers like Verizon, AT&T, and T-Mobile to attract and retain high-value customers. These deals typically require customers to sign up for premium-tier unlimited data plans.

Furthermore, the trade-in credits are usually distributed as monthly bill credits over the device's installment period, which helps reduce subscriber churn. The offers are primarily aimed at accelerating upgrades among customers with recent devices; Verizon and AT&T require an iPhone 14 or newer for maximum credit, while T-Mobile requires an iPhone 15 Pro or newer, according to the note.

Upfront Costs Remain

Despite the substantial trade-in values, the deals do not eliminate all initial expenses for the consumer. Bank of America pointed out that customers are still responsible for activation fees and sales tax on the full retail price of the new device.

This results in an estimated upfront cost of approximately $291 to $296 for the iPhone 18 Pro and $400 to $405 for the Pro Max, even with a qualifying trade-in.